Cryptocurrency Miners Are Using Old Tires to Power Their Rigs

This new “waste-to-energy” setup is meant to be less resource intensive.

An entrepreneurial cryptocurrency mining company has just announced an unusual deal: it has partnered with a tire-based waste-to-energy company in the United States to power its mining computers.

Standard American Mining and PRTI, a tire “thermal demanufacturing” company based in North Carolina, are powering graphics cards-based mining equipment to earn a range of alternative cryptocurrencies like Ethereum.

Basically, they take used tires and heat them to a precise temperature, resulting in components like steel (from belted tires), carbon black, and a burnable fuel. That fuel is the energy source driving turbines to make electricity, which powers an onsite cryptocurrency mining farm. Taking advantage of an underutilized electricity source to run computers isn’t groundbreaking, but the unusual set-up shows that cryptocurrency mining is now profitable enough to justify finding quite unconventional sources of cheap or new energy generation.

Cryptocurrency mining in general is the process that secures transactions and generates new tokens. It’s incredibly energy-intensive—for example, each Bitcoin transaction could embody enough energy spent mining to power the average US home for a week or more.

The above figure has rightfully caused some alarm. Most cryptocurrencies’ overall electricity consumption is affected mainly by their price: As the price goes up, more miners will join to try to claim new coins as mining rewards, consuming electricity.

If this year’s upward price trend continues, we could be looking at an incredible amount of power used by various cryptocurrency mining networks, including Bitcoin. Since a great deal of human electricity generation comes from burning fossil fuels like coal or natural gas, this is a cause for concern among environmental advocates. Scientists have estimated we have very little time left to avert serious climate change.

I spoke to Anthony Pompliano, CEO of Standard American Mining, via telephone about what the company wants to accomplish.

“Our strategy is to find non-traditional, near-zero-cost energy sources and build distributed computing facilities on top of them,” he explained.

It’s hard to know what to do with used tires. They burn hot enough to inspire a Simpsons town landmark and they leach nasty chemicals into the soil. They end up buried in landfills, downcycled into various materials like turf fields, or (controllably) burned for various useful components. Until we stop driving cars, we have to do something with all these tires. Turning them into energy isn’t as bad as it sounds.

"We’re less concerned with what label we have, and more concerned with building out a distributed computing network"

Burning a carbon-based fuel from tires creates a lot more greenhouse gas emissions than renewable power sources, like wind turbines or solar panels. This is somewhat mitigated by the fact that a tire can contain 14-27 percent natural rubber, for which the tree has already pulled carbon from the air to grow.

Tire-derived fuels can also be burned instead of coal at cement plants, for instance, reducing their notoriously-high carbon emissions by 18-24 percent. That’s why a 2006 EPA study found burning and recycling tires to have a higher net benefit on greenhouse gas emissions than landfilling them.

The tire recycling process produces a burnable fuel called syngas, used to drive a turbine and produce electricity. Before the mining deal, the used tire plant hadn’t been producing electricity onsite. Profits from selling all the “thermally demanufactured” (a great euphemism) tire products were sufficient. So this electricity comes from a heretofore unused source.

Pompliano wasn’t ready to disclose just how much electricity his mining operation is using, simply that it was “at a much larger scale than an amateur mine,” and that it was already generating steady returns.

Of course, there remain serious arguments about whether cryptocurrency is delivering enough value to justify its sizeable environmental footprint. While this argument could be leveled against almost any activity, it’s often the case with cryptocurrency or blockchain projects that similar computing technologies exist in centralized forms that currently run much more efficiently. This isn’t to say blockchains are useless, just that there are costs to their decentralization that are borne by the environment in the absence of something like a carbon tax.

So could all this mining not be displacing more conventionally “productive” uses of electricity? I asked Pompliano for his thoughts on the matter and plans for the future:

“As we build more and more of these, we’re building computing facilities—cryptocurrency is the most profitable application of this computing power today, but over time there will probably be more profitable applications. We’re less concerned with what label we have, and more concerned with building out a distributed computing network at a lower cost than the big guys,” he said.

As far as I can tell, this sounds sensible enough. While special Bitcoin mining chips have very limited outside uses, the graphics processing units employed by this outfit have a wider potential, for example researching protein folding for drug research.

For now though, enough people want a piece of cryptocurrency that the juice is worth the squeeze. All this mining is technically displacing other activity, like protein folding, that you could argue is a more socially valuable use of electricity. Is cryptocurrency mining sustainable right now? Probably not. But if blockchains can rapidly, radically scale up their efficiency, the calculation could change.